- CFA Exams
- CFA Level I Exam
- Study Session 19. Portfolio Management (2)
- Reading 56. Technical Analysis
- Subject 5. Technical Indicators
CFA Practice Question
Which momentum indicator is unbounded?
B. Stochastic oscillator
C. MACD
A. Relative strength index
B. Stochastic oscillator
C. MACD
Correct Answer: C
Because MACD is unbounded (it does not have any upper or lower limits to bind its movement), it is not particularly useful for identifying overbought and oversold levels.
User Contributed Comments 2
| User | Comment |
|---|---|
| gill15 | ROC and MACD fluctuate above and below zero |
| shann680 | MACD divergence is v helpful in identifying oversold/bought levels! |